BUSINESS

Piraeus Bank redeems state-guaranteed bonds

TAGS: Banking

Piraeus Bank said on Wednesday it will redeem the remaining state-guaranteed securities it issued under a liquidity boosting program launched in 2008, becoming the first Greek lender to fully exit the scheme.

The state-guaranteed notes had been issued under the framework of a so-called Pillar II scheme, launched by the government to help the economy weather the impact of the global credit crisis that erupted in 2008.

As the severity of the financial crisis reduced liquidity in the interbank market, the government launched the scheme to offer capital and liquidity support to the country’s banking sector.

Piraeus, Greece’s biggest lender by assets, said it will redeem 1.75 billion euros of remaining Pillar II securities on Thursday.

After the repayment the bank will no longer be subject to the support scheme’s restrictions, which required a government representative to sit on its board of directors in the last seven years.

[Reuters]

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